Community Health Options sues federal government for $5.7M

Photo / James McCarthy

Community Health Options, a Consumer Operated and Oriented Plan nonprofit insurer based in Lewiston, is suing the federal government to recoup $5.7 million in unpaid cost-sharing reduction payments it says is owed under a provision of the Affordable Care Act.

Community Health Options, the Lewiston-based nonprofit health insurer that is one of two insurers continuing to offer plans in Maine's Affordable Care Act individual marketplace, is suing the federal government to recoup $5.7 million in unpaid cost-sharing reduction payments.

The Bangor Daily News reported that CHO, in its lawsuit filed in the U.S. Court of Federal Claims, alleges that the federal government owes the company that amount under Section 1402 of the ACA.

"The government made monthly payments to the health exchanges since the ACA started in 2014, and it did so in 2015, 2016 and through September of 2017," CHO's legal counsel Stephen McBrady, attorney at Crowell and Moring LLP in Washington, D.C., told the BDN. "Community Health Options could not change its health plan part way through the year [to make up for the halt in reimbursements], so it was financially harmed. The $5.7 million matters to a nonprofit."

In its latest monthly report on CHO's financial performance, filed online Thursday, Maine's Bureau of Insurance stated the insurer incurred a $6.10 million net loss for November 2017 (compared to $1.46 million of net loss projected under its 2017 plan).

"Approximately $2 million of the $6.10 million loss was attributable to the termination of Cost Sharing Reduction payments by Centers for Medicare & Medicaid Services," Maine Bureau of Insurance reported. "The remaining November loss is primarily due to substantially higher per member claim obligations than expected."

The bureau reported that CHO's year-to-date reported net loss as of November was $2.92 million, but expressed concern that November's higher-than-expected net losses would continue in December.

"The BOI will continue to closely monitor CHO's performance and post monthly statements about its results," its Jan. 11 report stated.